Data Snacks, Member Exclusive

Data Snack: SMBs are growing increasingly resilient against macro headwinds

  • SMBs are confident they can successfully get through another period of economic difficulty despite inflation and supply chain issues, a new survey by Kabbage shows.
  • Having experienced the pandemic, SMBs feel better prepared to successfully navigate another period of economic turbulence.

Email a Friend

Data Snack: SMBs are growing increasingly resilient against macro headwinds

The US small and medium sized business sector is showing no signs of slowing – even with inflation, supply chain issues and a potential recession looming, SMBs are confident they can successfully get through another period of economic difficulty, according to a new Kabbage survey.

The small and medium sized business sector has grown significantly in the US over the past few years. In 2021, 5.4 million new small businesses entered the market, marking a 53% increase from pre-pandemic levels, according to census data. And just in the first quarter of this year, nearly 1.3 million applications were filed. 

This shows that more people are reconsidering their careers and finally taking the leap to own and run their own businesses, according to Brett Sussman, CMO at Kabbage. 

The stressful times small businesses experienced during the pandemic came with a silver lining – a third of SMBs surveyed now feel better prepared to successfully navigate another period of economic turbulence.

The vast majority (83%) of SMBs polled in the survey said they were concerned about an upcoming US recession. But despite the uncertainty, 80% of businesses were confident they could withstand such an economic downturn. 

Source: US Census

Even though there are macroeconomic headwinds such as inflation and labor shortages impacting them, small businesses can be quick to change in order to stay competitive, Sussman said.

“Small businesses are traditionally optimistic through difficult times because they’re comfortable making the necessary modifications to persevere,” added Gina Taylor Cotter, executive vice president & general manager of the U.S. Small Business Banking at Kabbage. 

The rising number of fintechs looking to help SMBs manage their finances has also been a positive influence on the sector by giving them the tools they need to run their businesses, Sussman told Tearsheet.

“Small business owners don’t start their company to spend hours upon hours a week managing their cash flow. This is a challenge we aim to solve as businesses are telling us they’re seeking an integrated suite of products that can help them simplify their cash flow management,” he said.

Around half of businesses reported trying out new competitive strategies compared to pre-pandemic times. Almost 60% of medium and large businesses and 30% of small businesses are prioritizing branding as a primary differentiator. There’s also a significant push towards marketing and ecommerce among small businesses. 

Monthly online sales represented around 40% of revenue on average, down from the 57% recorded in the March 2021 Small Business Recovery Report. The healthcare sector emerged at the top in terms of online sales growth, while hospitality recorded a drop. 

0 comments on “Data Snack: SMBs are growing increasingly resilient against macro headwinds”

10-Q, Member Exclusive

Back to the future: Jack Dorsey secures the reins of Square once again

  • Can Jack Dorsey's fresh focus on Square help boost stock returns and eventually uplift the Square business after CEO Alyssa Henry steps down?
  • The IPO Index witnessed moderate gains last week.
Sara Khairi | October 02, 2023
10-Q, Member Exclusive

Behind Citizens Bank’s evolving strategy in a crowded BNPL market

  • Citizens Pay's Christine Roberts shares insights on how Citizens Pay has evolved since its inception and if it has an edge over fintech BNPL lenders.
  • In other news, Arm and Instacart IPOs could be meaningful for Goldman Sachs to open new doors of revenue and IPO fees for the Wall Street firm.
Sara Khairi | September 25, 2023
10-Q, Member Exclusive

Chasing ambitions: SoFi elevates its game by participating in underwriting the Instacart IPO

  • Underwriting part of the Instacart IPO can be a big shot for SoFi, which went public in 2021 and is best known for student loan refinancing.
  • Also, Wall Street banks added modest gains to the IPO Index last week.
Sara Khairi | September 18, 2023
10-Q, Member Exclusive

Dime Community Bancshares steps into healthcare lending as part of its commercial banking expansion

  • Dime makes a move into the healthcare sector to offer financing solutions and support capital-intensive projects.
  • The CFPB is keeping tabs on Apple’s policy of limiting access to the NFC chip technology that makes Apple Pay the only mobile payment service that utilizes the ‘tap and go’ technology embedded in iOS devices limiting other companies from developing their own tap-to-pay apps for Apple devices.
Sara Khairi | September 11, 2023
10-Q, Member Exclusive’s shiny IPO debut: Can the mortgage lender pave its way to become a Wall Street darling?

  • Can gain Wall Street's respect?
  • Federal Reserve Chair Jerome Powell on Friday warned that additional interest rate increases could be yet to come, as inflation is still above where policymakers feel comfortable.
Sara Khairi | August 28, 2023
More Articles